As SaaS is a new business model that enables business customers to benefit from the most advanced technologies at a lower-cost subscription model. Keeping the customer acquisition cost (CAC) low and manageable become critical factor for the SaaS vendor success While planning B2B SaaS sales organization and processes, realistic customer segmentation definition becomes important than ever to the sales success!

1. Revital Libfrand, Co-founder
Ignite Cloudware
Customer Segmentation
in B2B SaaS Sales–
Overview

2. 2
Is customer Segmentation for SaaS different from others?
Customers segmentation is a common practice that divide the
company target markets and/or customers into subsets that
have something in common.

3. 3
Is customer Segmentation for SaaS different from others?
As SaaS is a new business model that enables business customers to
benefit from the most advanced technologies at a lower-cost
subscription model. Keeping the customer acquisition cost (CAC) low
and manageable become critical factor for the SaaS vendor success.

4. 4
Is customer Segmentation for SaaS different from others?
Companies use customer segmentation to:
• Address relevant offering to each segment
• Allocate sales resources according to the relevant segment
• Communicate with each segment in the relevant channel

5. 5
Is customer Segmentation for SaaS different from others?
Segmentation Definition Challenges in B2B SaaS Sales:
• Different sales cycles are required when approaching B2B sub-
segments
• Allocating the required sales resources for each sub-segment
directly affect the CAC
• Mismatching resource with the relevant sub-segment creates a
gap.
My customer pays 199 $
MRR …and thinks he
owns our company…

6. 6
Common Segmentation Models- Overview
Geographic
Segmentation
Segmentation
By Customer
Type
Demographic
Segmentation
Behavioral
Segmentation
Segmentation
By Occasion
Segmentation
By Value
Where is
my
customer?
What is he
doing?
Who is my
customer?
How is my
customer
using the
product?
When
should I
propose
my
product?
How much
the
revenue I
get?

7. 7
Common Segmentation Models - Overview
Geographic
Segmentation
Divide your
target market
By country,
region, zip
code etc
Segmentation
By Customer
Type
Divide your
target market
by their
business,
consumer vs
companies
Behavioral
Segmentation
Divide your
target market
according to
their usage of
your product
Demographic
Segmentation
Divide your
target market
by age,
gender,
education etc
Segmentation
By Occasion
Approach
your
customers is
based on
special
products you
sell
specifically
for special
occasions
Segmentation
By Value
Divide your
customer
according to
potential
revenue they
would bring
to your
company

8. 8
Common customer segmentation in B2B SaaS Companies
Customers
Funnel
Small Business
Geography
Mid-size
Business
Geography
Enterprises
Geography
Most of the B2B SaaS Companies divide their customers funnel to
small, medium and enterprises companies; in accordance the company
allocate sales REPs, usually geography based, to handle the sales
processes.

9. 9
Next Challenge: define each segment….
SaaS companies are struggling with providing an accurate definition to
each segment…
Characteristics for segment definition:
• Small, medium and enterprise segmentation is defined according to
customer’s yearly revenues; i.e. small business- companies with annual
revenues of 1M$
• Small, medium and enterprise segmentation is defined according to
customer’s number of employees; i.e small business with 100 or fewer
employees
Customer perspective
• Small, medium and enterprise segmentation is defined according to the
product package the customer bought.
• Small, medium and enterprise segmentation is defined according to the
annual/monthly revenues the customer contributes to the vendor
Saas Vendor perspective

10. Let’s take a look at the sales cycle
process….
10

11. 11
Sales process characteristics
EnterpriseMedium CompanySmall Business
Each potential buyer
within the
organization has
other interest/needs
Intermediate
difficulty
Need is usually clear
and easy to identify
Identify need
Involves several
people from business
side as well as IT side
Involve few peopleUsually done by the
business owner
Decision making
Complex alternatives
process evaluation
Intermediate
alternatives process
evaluation
Not always done,
might check other
alternative pricing
Solution Alternatives
evaluation
Usually complex and
long process (few
month to years)
Intermediate sale
cycle (few weeks to
few months)
Usually very short
(days-to few weeks)
Overall sale cycle

12. 12
Sales process characteristics
EnterpriseMedium CompanySmall Business
Must have legal
department to
approve the
contract…and they
always have
something to change
Intermediate
process, legal
counsel will shortly
approve the generic
contract if no critical
issues are present
Short process, buyer
will not involve a
legal counsel if
generic contract is
proposed
Contract Issues
Many interactions to
complete the sale
process
Intermediate
number of
interaction
Few interaction# of interactions
with customer
Seriously evaluated
prior purchasing
The issue is
evaluated slightly
prior purchasing
Standard support is
usually accepted
Maintenance &
Support
Willing and use to
pay premium fees as
long as ROI is
demonstrated
Price is one of the
parameters been
considered
Price sensitivePrice

13. 13
Sales process characteristics - summary
Small business
- short &
simple sales
process
Medium
company -
Intermediate
sales process
Enterprise –
long &
complex sales
process

14. 14
How is the GAP created?

15. 15
Suggested Segmentation for B2B SaaS
Customers
Funnel
Geography
Small Business
Package
Mid-size Business
Package
Enterprises
Package
• Adjust segmentation characteristics for each
market
- You can’t define a global homogenous
characteristics for small, medium & enterprises
without localizing the levels per geography. A
medium size company in the USA with 1000
employees might considered an enterprise in a
different country.
• Evaluate the sector your company is targeting.
For example: products targeting IT department;
sales cycle complexity also depends on the IT
department size; i.e. a huge constructions
building company with thousands of employees
but with medium size IT department

16. 16
Suggested Segmentation for B2B SaaS
Customers
Funnel
Geography
Small Business
Package
Mid-size Business
Package
Enterprises
Package
• Create a package per segment
The package should meet the segment needs
(SLA, legal, security, availability etc) and must
justify your investment in the sale process
• The sale cycle must be adjusted to the
customer nature way of doing
businesses…sales process within an enterprise
takes months even if your great product price
cost only 199$/month

17. 17
…and let’s ensure we make it work…
Customers
Funnel
Geography
Small Business
Package
Sales REP
Mid-size Business
Package
Sales Manager
Enterprises
Package
Sales Executives
• Assign relevant sales professionals that would be knowledgeable
with sales process and the customer nature

18. Are you struggling with clearly
define sales processes within
your inside sales organization?
18

19. 19
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Our inside sales team setup & ongoing management in a nutshell :

20. 20
Ask me how to build an optimized inside
sales team for your SaaS business
www.ignitecloudware.com
+972-72-2116601
revital@ignitecloudware.com